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Rosy year ahead for big banks

by Staff Reporter7 minute read

Australia's major banks are tipped to increase profitability in 2010, as bad debts decline and they leverage the market dominance gained during the global financial crisis according to the Sydney Morning Herald.

The big four banks are in "a very dominant and advantageous position," Tyndall Investment Management portfolio manager Craig Young told the SMH.

"Their funding position is a lot stronger compared to the regionals or overseas institutions," Mr Young said.

"Profitability is going to improve and bad debt charges are going to come off."

CBA expanded its market share in home loans to 29.5 per cent by October from 24.2 per cent 12 months before, according to figures from the Australian Prudential Regulation Authority. The increase was due mainly to its takeover of BankWest last December, and partly because the bank captured much of new home loans during 2009.

Westpac's share expanded to 26.5 per cent from 17.8 per cent as it took over St George and also gained new loans.

The big four together now have over 85 per cent of Australian home loans, having grown from about 75 per cent in October 2008, and about 82 per cent of all loans, compared with 71 per cent the year before.

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